In The Spotlight

ELECTION-RELATED SPENDING BY POLITICAL COMMITTEES AND NON-PROFITS UP 40% IN 2010

Report Prepared for a Conference on the Impact of Citizens United
Jointly Sponsored by the Campaign Finance Institute and the University of Virginia’s Miller Center of Public Affairs

[Detailed historical tables and tables for individual House and Senate races attached]

One part of the 2010 election spending story is based on publicly reportable activities. Non-party independent campaign spending in congressional elections is up by a very noticeable 73% in mid-October 2010, compared to the same time in 2008. In these reports, support for Republicans has nearly tripled from the mid-October level for 2008. There has already been more independent spending and electioneering in 2010 than in the full election cycle of 2008 – and this is before the traditionally heavy-spending final weeks of the campaign.

TABLE 1. NON-PARTY INDEPENDENT SPENDING AND ELECTIONEERING

Through Mid-October
($ millions)

Full Election Cycle
($ millions)

2010

Total House + Senate

147.5

--

Supporting Democrats

42.0

--

Supporting Republicans

105.5

--

2008

Total House + Senate

85.3

119.6

Supporting Democrats

48.5

54.8

Supporting Republicans

36.8

64.5

2006

Total House + Senate

32.0

53.9

Supporting Democrats

17.9

30.4

Supporting Republicans

11.6

23.3

But as impressive as these numbers may seem, they cover only a portion of the relevant spending expected. In 2008 reportable independent spending and electioneering in congressional elections amounted to $119.6 million (see the table above) while the estimate for all election-related spending by 527s (political committees) and non-profit groups came to $400 million (including the reportable $119.6 million.) Thus, reportable independent spending and electioneering made up less than 30% of all estimated political spending by 527s and nonprofit groups in 2008. When the full range of spending for 2010 is estimated 527s and nonprofits are likely to spend more than $560 million on the congressional elections of 2010, an increase of 40% over 2008 (See Table 2 below).

These conclusions are based a Campaign Finance Institute analysis of spending at similar times during the 2010, 2008 and 2006 election cycles. They were prepared for release in conjunction with an October 18 conference on the impact of the Supreme Court’s January 2010 decision in the case of Citizen United v. Federal Election Commission. The conference was jointly sponsored by CFI and the University of Virginia’s Miller Center of Public Affairs. (More information about the conference is available here.)

Citizens United Impact? What We Don’t Know

The Citizens United decision overturned federal laws prohibiting corporations and labor unions from using their treasuries to pay for political expenditures. Since this was the decision’s basic holding, it is not surprising to see more independent spending by labor unions and by nonprofit advocacy corporations that accept corporate as well as individual contributions.

But before we rush to judgment about the impact of Citizens United, there is a lot we do not yet know. For example, we do not yet know whether business corporations are spending more money on politics. While the decision enables more direct business participation, it does not mean more business corporations will feel an incentive to act in this way, instead of giving money through intermediaries (including trade associations and non-profit advocacy organizations) as they have done in the past. Rather than seeing new money, it is at least theoretically possible that money is simply moving from one activity to others closely related: old wine in new bottles. Money that used to be spent on non-reportable (but candidate-specific) issue advertising might now be used more overtly for politics without changing the total. The evidence so far is mixed; any conclusion is highly premature for reasons explained below.

We do know that some of the of the money that used to be spent on issue advertising before the Bipartisan Campaign Reform Act of 2002 was spent after the law passed through “527” political committees in 2004. In 2006 spending by the 527s was down, but by 2008 CFI was reporting that spending by the 527s (about $200 million) was matched by another $200 million being put into the system by a variety of nonprofit 501c groups. (Previous CFI studies on spending by nonprofits in 2006 and 2008, explaining the methods used for CFI’s estimates, are available on the CFI website at http://www.cfinst.org/federal/interest_groups.aspx.)

It has always been difficult to document political spending by 501c organizations precisely. There has been a great deal of attention paid in recent months to legislation that would require organizations to report the funding sources if they already report their spending to the Federal Election Commission. But this disclosure issue captures only half of the equation. A great deal of political spending does not have to be reported at all. All organizations have to report the money they spend on express advocacy (independent spending) and on broadcast electioneering close to an election. However, they do not have to report electioneering-types of advertising before the covered time period (60 days before a general election or 30 days before a primary); they do not have to report spending at any time on non-broadcast forms of communication (including mail, Internet and telephone); and they do not have to report candidate-specific issue ads that fall outside the legal definition of political speech.

As a result, Table 2 (below) can only be said to contain best estimates. For all years, it includes all spending whose reporting is mandated by law. This includes all spending by 527 political committees as well as all independent spending and electioneering by others. On top of that, CFI tracks tax filings, annual reports, and media interviews to learn how much above their reported spending the groups claims to have spent on (or budgeting for) politics. These figures only include groups with a focus on federal politics.

TABLE 2. ESTIMATED SPENDING ON CONGRESSIONAL ELECTIONS
BY POLITICAL COMMITTEES AND NONPROFITS
(millions of dollars)

As the table shows, Democratic groups are on a path toward spending about 10% more than in 2008 while Republican groups seem to be up 70%. If these numbers hold, they clearly would signal new wine and not just re-pouring the old. But as stated above, we cannot yet know this. In past years some organizations have overestimated their budgets as a way to claim territory over their competitors, while others underestimate, raising more than they had expected.

We also cannot yet know how much of the increase stems from Citizens United. Political spending by nonprofits surged in the 2008 election, one election before this Supreme Court’s decision. Most of the organizations prominent in this election are either ongoing ones that have increased their budgets by amounts that seem consistent with the political climate, or new ones raising funds from sources not radically different in kind from ones used in the recent past.

Table 2: Estimated Total Spending by Political Committees and Non-Profit Groups in Congressional Elections, 2006-2010

Table 3: 2010 House Races with Non-Candidate Expenditures of $50,000 or more

Table 4: Candidate Receipts and Non-Candidate Spending in All U.S. Senate Races, 2010

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The Campaign Finance Institute is a non-partisan, non-profit institute affiliated with The George Washington University. Statements of the Campaign Finance Institute do not necessarily reflect the views of CFI's Trustees or financial supporters.